All Forum Posts by: Kyle Mccaw

@Audrey Ezeh Sure but finding a good manager for class D is difficult and not cheap. Be willing to step in if things don't work out. 

Paying for utilities sucks. I encourage you to look into billing that out as a separate fee. Some areas are regulated on how you account for the expense. Check out this link. 

http://www.accurateutility.com/rubs.html

We manage several multifamily properties, none that are separately metered. But we have our tenants pay that expense. 

An experienced D class investor should be able to upgrade the tenants, "encourage" bad tenants to move out, increase rents and fees. I would not suggest this as a newbie investment. 

The only time I have seen it make financial sense is for low end properties. Owner financing eliminates high maintenance expenses that often come with low end properties. Believe it or not but the ROI can be great. Key is to sell at a higher price than you purchased at. Buy cheap, put a few bucks in it to make it livable, take a fair down payment, tote a note. Lonnie Scruggs is the king of owner finance. I encourage you to read all his books. His focus is on mobile homes but the process can be used for low end single family homes. 

Lifestyles Unlimited Wealth and Passive Income Expo

SATURDAY, MARCH 18, 2017 – 7:00 AM - 7:00 PM
GEORGE R. BROWN CONVENTION CENTER - HOUSTON, TX

This is a great event. If you are not familiar with Lifestyles Unlimited, check out their radio show or podcast. I give them credit for helping me take my investing to the next level. 

My first property was a duplex purchased with a FHA loan. I lived in one side rented out the other. Then I lease out one of my bedrooms. The rent from my tenants covered my entire PITI. There is no question as to whether or not it is a good idea. The only question is, can you find a duplex that meets all your non-financial criteria (location, condition etc).

@Diane G. Where I mention the 30-40% expense being on the high end, that was referencing @Jordan Grimstad 's estimate. I don't have expenses that high. Keep it cheap, safe and secure. And I don't pay utilities. Anyways make the tenant pay those or they will take advantage of you.

1) I can't help you with this

2) Fully expect the maintenance to be higher. Inspect the properties to make sure they are changing air filter and there are not water leaks. Remember these tenants live a very different lifestyle than you. Don't be surprised if they have food on the ceiling. Or motor oil on the living room floor. Don't be quick to kick someone out if they ruin the carpet. Just ride it out because you will need to repaint regardless of if the move out tomorrow or 10 years from now. 10yr is better. Turns can cost more in C than B properties. But remember their standards are lower, so be careful not to spend money on items that a B class would require. And your next tenant maybe just as bad. 30-40% expense would be on the high end. For me my section 8 tenants tend to stay longer in my properties than non-section 8.

3) We look more at rent rate to purchase price rate. I want more the 1.5% of the purchase price in rent each month. Example: $50,000 value should rent for more than $750/month. But every market is different.

You can get an option for the property. Then go out an market the land portion. I would expect the 12 mobile to bring in more than $3,200. You may have room to increase the lot & mobile rents. If it doesn't work out for you, I would be interested in learning more about the full property.

Daniel you may need to visit with your insurance agent. Make sure he understands this is a rental property. A landlord policy has some different coverage than a homeowners. Most of my rentals are insured with ReiGuard. Check them out. Like my other policies $300,000 liability is included.